Rite Aid closing at least 63 stores

[jamcool]

I know California won’t allow in out of state fresh milk, they supposedly have to add powdered milk to liquid milk due to rules favoring the California dairy industry.
Also no black licorice sold in California due to Prop 65 laws…licorice is considered a possible carcinogen….in extremely large amounts.

[storewanderer]

I know California won’t allow in out of state fresh milk, they supposedly have to add powdered milk to liquid milk due to rules favoring the California dairy industry.

I thought that was a law too, but I think something changed on that. Aldi was selling milk bottled in TX when they first went into SoCal. Another way some products especially "Organic Milk" products get around it is with the ultra pasteurized (very long shelf life) milk.

[HCal]

I know California won’t allow in out of state fresh milk, they supposedly have to add powdered milk to liquid milk due to rules favoring the California dairy industry.

Kirkland brand milk sold at Costco in SoCal comes from Arizona, per the stamped dairy code. I've also seen milk from a Nevada dairy (Model Dairy, now a subsidiary of Producers) in Sam's Club somewhere in California.

A state cannot ban or impose a tariff on out-of-state products, as this would violate the commerce clause of the constitution. Of course they can still set their own standards.

[storewanderer]

I know California won’t allow in out of state fresh milk, they supposedly have to add powdered milk to liquid milk due to rules favoring the California dairy industry.

Kirkland brand milk sold at Costco in SoCal comes from Arizona, per the stamped dairy code. I've also seen milk from a Nevada dairy (Model Dairy, now a subsidiary of Producers) in Sam's Club somewhere in California.

A state cannot ban or impose a tariff on out-of-state products, as this would violate the commerce clause of the constitution. Of course they can still set their own standards.

So, the law is that California milk must have a slightly higher fat content/protein content than Federal standards. This in effect makes it rather difficult for producers to produce milk out of state just for CA unless they want to follow those higher standards which adds to costs or if they do two separate product runs (this is what Model Dairy has historically done) then the logistics of ensuring the right product gets to the right place is a big deal.

It is funny because I always thought the CA milk tasted better than the milk that Model Dairy produced here. Now I know why. I've wondered this my whole life.

I think Sam's Club back-hauls that milk into CA. Model Dairy would long be out of business if it weren't for Wal Mart because that is their main, almost only, private label customer in the area (back in the 90's they filled milk for almost every store in the area- Raleys/Scolaris used them to fill Sunnyside products, Albertsons for private label, Costco, everyone). Smiths/Safeway have little more than a single shelf of Model Dairy products. Most convenience stores who used to sell the Model Dairy products have switched to other brands through their convenience store distributor (Darigold at many, Meadow Gold from Utah at others).

Producers handling of Model Dairy is interesting. They have gotten the product back into more stores than Dean had it in. They have quarts with a panel about "local milk local cows" and how the plant is in Reno and other things. Looking at the date stamp on these quarts they are actually filled at an 06-xxxx plant in California, not even local milk. A total joke. The only thing Model Dairy seems to make in Reno is plastic jugs of milk (mostly gallons) and the little half pints of milk for school lunch. Pricing on Model Dairy items has also gone down a little since Producers got involved. But pricing of the Umpqua products (ice cream specifically) has shot up since Producers bought them and they downsized from a 1.75 quart to a 1.5 quart container for the ice cream. Overall not real happy with Producers for a variety of reasons- the deceptive "local milk local cows" quart milk cartons in Reno plus the price hike/downsize on the Umpqua ice cream.

[storewanderer]

Back to the Rite Aid topic in addition to the Woodland, CA distribution center closure announced yesterday they also did a number of layoffs at the corporate office. This seemed to impact various areas from customer service representative to things like senior vice president of retail or similar. The number of layoffs was in the hundreds so I am sure we will see a WARN filing for it. Without knowing exactly how many people they had/have in each impacted position, it is difficult to assess the exact impact of these layoffs at the corporate office. Rite Aid has been "very lean" at the corporate office level for quite some time. If they had 200 customer service representatives but laid off 30 that is still quite a few. But if they only had 40 customer service representatives but laid off 30 that is a different story...

[retailfanmitchell019]

The worst distances from Lancaster, CA for some of the remote stores they've kept open:
Crescent City, CA 12 hours (Des Moines is only 8 hours- maybe they will serve this store from there)
Yreka, CA 9.5 hours (Des Moines is only 8 hours)
Alturas, CA 9.5 hours (Des Moines is 9 hours)
Quincy, CA 8.5 hours (Des Moines is 11.5 hours)
Burney, CA - complete toss up- just over 9 hours from either Lancaster or Des Moines
Eureka, CA/Fortuna, CA/Arcata, CA - again complete toss up around 10 hours from either Lancaster or Des Moines

Doing directions on Google Maps, Burney and Fortuna are closer to Lancaster, CA than Des Moines, WA. Eureka and Arcata are closer to Des Moines.

[storewanderer]

The worst distances from Lancaster, CA for some of the remote stores they've kept open:
Crescent City, CA 12 hours (Des Moines is only 8 hours- maybe they will serve this store from there)
Yreka, CA 9.5 hours (Des Moines is only 8 hours)
Alturas, CA 9.5 hours (Des Moines is 9 hours)
Quincy, CA 8.5 hours (Des Moines is 11.5 hours)
Burney, CA - complete toss up- just over 9 hours from either Lancaster or Des Moines
Eureka, CA/Fortuna, CA/Arcata, CA - again complete toss up around 10 hours from either Lancaster or Des Moines

Doing directions on Google Maps, Burney and Fortuna are closer to Lancaster, CA than Des Moines, WA. Eureka and Arcata are closer to Des Moines.

It would be interesting if Fortuna was served by Lancaster and Eureka/Arcata are served by Des Moines. That would be funny as they're all the same general market up there.

If the difference is less than 30 minutes I considered it a toss up. Too many variables - traffic in and out of SoCal, traffic through large cities en route, two lane road back ups, etc.

What is funny is to send the truck to Quincy, Burney, or Alturas from Lancaster these clowns will very likely drive it through Reno (and right past the stores closed in Gardnerville and Bishop).

The other thing I thought of is the Thrifty Ice Cream supplies all of these CA stores right up to Yreka/Crescent City/Alturas out of El Monte but that truck is a little different as it does not show up weekly. It shows up every 3 weeks I think. So they should have good data on what it costs to send the SoCal truck up to the extreme northern areas.

The internal document states everything will be shifted to Lancaster.

[storewanderer]

I am really starting to wonder how much longer Rite Aid is going to make it as a chain...

I have to think they are at the tail end of the store closing program and next week they restructure regional management. I hope after next week we will see a renewed focus on the stores they are planning to keep in terms of operations/marketing/merchandising.

Summer items are starting to show up in the store for seasonal which is good to see.

I get the feeling they are trying to continue as a going concern and I see no reason why they can't continue (this is nothing like Bed Bath and Beyond's poorly merchandised/nothing people wanted to buy in the stores mess) but some stability really needs to come to operations because this store closing program and layoff program that seem to never end don't do much for stability.

[storewanderer]

Rite Aid says there are two parties negotiating to buy the retail assets. I wonder WHO thovs two partreens may possibly be.

However they have also this week hired Hilco and SB360 to oversee further store closing sales going forward. The stores are being grouped into 3 groups for the liquidators.

[HCal]

Rite Aid says there are two parties negotiating to buy the retail assets. I wonder WHO thovs two partreens may possibly be.

However they have also this week hired Hilco and SB360 to oversee further store closing sales going forward. The stores are being grouped into 3 groups for the liquidators.

Yikes, that's a terrible sign. Hiring 2 liquidators means that more closures are coming.

I have no idea who the 2 parties might be, but I'm guessing one is private equity (Apollo?) and the other is Walgreens.